Spearheading marketing for an e-commerce business in 2024 comes with many challenges, one of the biggest being attribution - more specifically, incrementality.
Before we dive into the rabbit hole of incrementality, let’s start by defining what it is:
Incrementality is the measure of the additional impact or lift generated by a marketing activity beyond what would have happened without it.
In other words, what is the true value added to the business for each of our marketing activities?
In this post, I will introduce incrementality, and outline how to utilize native tools in Meta to get more insights into the incrementality for your business. More specifically, we will cover:
1. What is incrementality and why is it important?
2. How can we use Meta Experiments to understand more about our incrementality on Meta?
3. What are the different types of experiments?
4. How do you implement your first experiment?
Let's get to it 🙌
I just claimed that incrementality is one of the biggest challenges for anyone spearheading marketing for an ecommerce in 2024. But why is that the case? And more importantly, why is it becoming more and more important?
First, the advertising landscape has become increasingly fragmented over the last 10 years. Now, most ecommerce is not just running ads on one platform. Today, the typical mix consists of multiple platforms like Meta, Google, Tiktok, Snapchat, Pinterest etc. This is making it increasingly difficult to understand what value each platform brings to the firm.
Secondly, consumers are increasingly interacting with your brand from multiple devices, making the purchase process longer and less linear. Back in the day, consumers logged on to their home computer, where all online interactions with the brand happened. Now, they are using their computer, their phone, their tablet - maybe they even have multiple devices in each category, which means you have to track across devices, resulting in less accurate tracking.
Lastly, we need to add several technical difficulties to the mix. The introduction of Intelligent Tracking Prevention (ITP), App Tracking Transparency, and the European Cookie Compliance policies are all technical measures put in place, resulting in companies having a hard time understanding the true incremental value added from each of their digital activities. Fingers crossed this trend in tracking difficulties will derail, but as of right now, nothing is indicating that. We can only expect this issue to grow over the coming years.
If you are running ads on Meta, they offer you a great opportunity to get a sense of your incremental return on investment from your activities on the platform, and are probably one of the best advertising platforms out there for it.
In Meta, there are two main types of experiments, or 'studies' as they call them, that you can run: self-service and fully managed
Self-service being the easy and approachable solution, while fully-managed is much bigger and complicated, but also provides more flexibility in the study design. Please note that fully-managed studies require that you have a Meta account executive connected to your account - either directly or through an agency.
Let’s focus on the self-serviced options for now. There are three options for self-serviced studies on Meta:
A/B testing: Split testing of minor elements in the account on either campaign group, campaign, or ad set level.
Brand lift study: Measure the impact of Meta ads on brand awareness, recall, consideration and action intent.
Conversion lift study: Measure the incremental impact of Meta ads on purchases or other conversions.
The conversion lift study is great for understanding the incremental revenue from running campaigns on Meta. It takes five minutes to implement, thus there is no reason for not doing so.
One important note, when it comes to the brand lift and conversion lift study… To ensure a lift from the ads can be calculated, a holdout group of 10% of your test group will be established. This means that in the testing period, 10% of the test group audience will not receive any ads from your brand.
It’s now time to dive into the account and set up your first experiment to get insights on the incrementality of your advertisement on Meta.
Luckily, setting up your first experiment is pretty easy 🥳
Step 1: Navigate to your Meta Business Manager and click on “Experiments”.
Step 2: Click “Create test” and pick the desired test type. To study the incrementality of your advertisement on Meta, a conversion lift study is the right choice for you.
Step 3: Now it’s time to fill in a lot of information. Select the campaigns you want to include in the study, specify the testing period, and ensure the right tracking event(s) is selected. Please note that you can create multiple cells for the study, but that would require substantially more data for the result to become statistically significant. You can also include multiple tracking events (objectives), if you have primary and secondary metrics, which are important to evaluate.
Step 4: Press “Review test details” and set the study live.
That’s how simple is it - now it’s your turn 😉
There is no doubt, incrementality is becoming increasingly important for all ecommerces. We are living in a time where more and more advertisement channels are added to the mix, legal and technical barriers are put into place, and the potential customers increase their number of devices used
Luckily, advertisement platforms are introducing strong countermeasures to continue allowing for insights into incrementality of our marketing activities. Meta’s Experiments is right now one of the strongest and easiest to use tools out there, thus should be the first stop for most advertisers.
If you are not already running experiments as part of your recurring activities on Meta, the best time to start was yesterday 🚀
Then reach out to me on email, ks@profoundnorth.com, or by phone, +45 22 41 77 97.
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